First, concerning your tentative explanation: the status of '$x$' is something difficult to convey and inherently subtle. I guess you ran into this issue at least as much as into the absolute value issue. One thing that needs to be told is that as a variable, $x$ is a placeholder just meant to say that its various apparitions in a formula like the one you wrote, all denote the very same number. Try explaining that by replacing it by another letter which you replace by $x-4$, or use sentences like
Given any number, the absolute value of this number is another number; if this number is non-negative then that number is equal to this number by definition, and if this number is negative then we define that number to be minus this number. In particular that number is always non-negative and has the same magnitude than this number.
Then observe that giving a name to "this number" (say, $y$ or $\square$ or whatever) and "that number" (usually $|y|$ or $|\square|$ or $|\mathrm{whatever}|$) makes things easier to understand.
Concerning the absolute value issue, you can add other ways to see it (like above: a non-negative number having the same magnitude as the given number ; or the distance to the origin) and explain why they all give the same result. Once this meaning is understood, you can go with formal resolution of the problem. In my experience, trying to get to the formal manipulation of mathematical symbols before they make sense usually causes trouble.
Added in edit: I must say that reading other answers makes me realize that, while I still endorse mine, I kind of fall in the French pitfall of being quite abstract and formal. One should definitely read also the answers below, and notably consider visual explanations and tackle particular cases.